The economy of Israel was initially primarily socialist and the country dominated by social democratic parties until the 1970s. Since then the Israeli economy has gradually moved to capitalism and a free market economy, partially retaining the social welfare system.

Prehistory

Between 2.6 and 0.9 million years ago, at least four episodes of hominine dispersal from Africa to the Levant are known, each culturally distinct. The flint tool artifacts of these early humans have been discovered on the territory of the current state of Israel, including, at Yiron, the oldest stone tools found anywhere outside Africa. Other groups include 1.4 million years old Acheulean industry, the Bizat Ruhama group and Gesher Bnot Yaakov.[4]

In the Carmel mountain range at el-Tabun, and Es Skhul,[5]Neanderthal and early modern human remains were found, including the skeleton of a Neanderthal female, named Tabun I, which is regarded as one of the most important human fossils ever found.[6] The excavation at el-Tabun produced the longest stratigraphic record in the region, spanning 600,000 or more years of human activity,[7] from the Lower Paleolithic to the present day, representing roughly a million years of human evolution.[8]

Early Israelites

The Merneptah stele. While alternative translations exist, the majority of biblical archeologists translate a set of hieroglyphs as "Israel", representing the first instance of the name Israel in the historical record.

The first record of the name Israel (as ysrỉꜣr) occurs in the Merneptah stele, erected for Egyptian Pharaoh Merneptah (son of Ramses II) c. 1209 BCE, "Israel is laid waste and his seed is not."[10]William Dever sees this "Israel" in the central highlands as a cultural and probably political entity, more an ethnic group rather than an organized state.[11]

Ancestors of the Israelites may have included Semites native to Canaan and the Sea Peoples.[12] McNutt says, "It is probably safe to assume that sometime during Iron Age I a population began to identify itself as 'Israelite'", differentiating itself from the Canaanites through such markers as the prohibition of intermarriage, an emphasis on family history and genealogy, and religion.[13]

Villages had populations of up to 300 or 400,[14][15] which lived by farming and herding, and were largely self-sufficient;[16] economic interchange was prevalent.[17] Writing was known and available for recording, even in small sites.[18] The archaeological evidence indicates a society of village-like centres, but with more limited resources and a small population.[19]

Israel and Judah

The Hebrew Bible describes constant warfare between the Jews and other tribes, including the Philistines, whose capital was Gaza. The Bible states that King David founded a dynasty of kings and that his son Solomon built a Temple. Yigael Yadin's excavations at Hazor, Megiddo, Beit Shean and Gezer uncovered structures that he and others have argued date from his reign,[20] but others, such as Israel Finkelstein and Neil Silberman (who agree that Solomon was a historical king), argue that they should be dated to the Omride period, more than a century after Solomon.[21] This building is not mentioned in surviving extra-biblical accounts.[22] Possible references to the "House of David" have been found at two sites, the Tel Dan Stele and the Mesha Stele which describes an 840 BCE Judean invasion of Moab.[23] Both David and Solomon are widely referenced in Jewish, Christian and Islamic texts.

Modern scholars believe that refugees from the destruction of Israel moved to Judah during the rule of King Hezekiah (ruler from 715 - 686 BCE), greatly expanding Jerusalem and leading to construction of the Siloam Tunnel which could provide water during a siege.[27] The refugees brought with them new religious ideas which led, under King Josiah (ruler from 641 - 619), to the writing of the books of Deuteronomy, Joshua and to the accounts of the kingship of David and Solomon in the book of Kings. The books are known as Deuteronomist and considered to be a major key step in the emergence of Monotheism in Judah. They were written at a time that Assyria was weakened by the emergence of Babylon and may be a committing to text of more ancient verbal traditions.[28]

Exile under Babylon

In 586 BCE King Nebuchadnezzar II of Babylonconquered Judah. According to the Hebrew Bible, he destroyed Solomon's Temple and exiled the Jews to Babylon. The defeat was also recorded by the Babylonians[29][30] (see the Babylonian Chronicles). Babylonian and Biblical sources suggest that the Judean king, Jehoiachin, switched allegiances between the Egyptians and the Babylonians and that invasion was a punishment for allying with Babylon's principal rival, Egypt. The exiled Jews may have been restricted to the elite.

Second Temple period (530 BCE–70 CE)

Persian and Hellenistic rule

In 538 BCE, Cyrus the Great of Persia conquered Babylon and took over its empire. Cyrus issued a proclamation granting subjugated nations (including the people of Judah) religious freedom (for the original text see the Cyrus Cylinder). According to the Hebrew Bible 50,000 Judeans, led by Zerubabel, returned to Judah and rebuilt the temple. A second group of 5,000, led by Ezra and Nehemiah, returned to Judah in 456 BCE although non-Jews wrote to Cyrus to try to prevent their return.

The Jewish Temple in Jerusalem was granted special permission not to display an effigy of the emperor, becoming the only religious structure in the Roman Empire that did not do so. Special dispensation was granted for Jewish citizens of the Roman Empire to pay a tax to the temple.

Judea was made a Roman province in 6 CE. Following the next decades, though prosperous, the society suffered increasing tensions between Greco-Roman and Judean populations.

In 64 CE, the High Priest Joshua ben Gamla introduced a religious requirement for Jewish boys to learn to read from the age of 6. Over the next few hundred years this requirement became steadily more ingrained in Jewish traditions.[38]

In 66 CE, the Jews of Judea rose in revolt against Rome, naming their new state as "Israel".[39] The events were described by the Jewish leader/historian Josephus, including the desperate defense of Jotapata, the siege of Jerusalem (69–70 CE) and the desperate last stand at Masada under Eleazar ben Yair (72–73 CE). Josephus estimated that over a million people died in the siege of Jerusalem. Jerusalem and the Temple lay in ruins. During the Jewish revolt, most Christians, at this time a sub-sect of Judaism, removed themselves from Judea. The rabbinical/Pharisee movement led by Yochanan ben Zakai, who opposed the Sadducee temple priesthood, made peace with Rome and survived. After the war Jews continued to be taxed in the Fiscus Judaicus, which was used to fund a temple to Jupiter.

Late Antiquity and Middle Ages (70–1517)

Bar Kokhba revolt

A cluster of papyrus containing Bar Kokhba's orders during the last phase of the revolt

From 115 to 117, Jews in Libya, Egypt, Cyprus, Mesopotamia and Lod rose in revolt against Rome. This conflict was accompanied by large-scale massacres of both Romans and Jews. Cyprus was severely depopulated and Jews banned from living there.[40]

In 131, the Emperor Hadrian renamed Jerusalem "Aelia Capitolina" and constructed a Temple of Jupiter on the site of the former Jewish temple. Jews were banned from living in Jerusalem itself (a ban that persisted until the Arab conquest), and the Roman province, until then known as Iudaea Province, was renamed Palaestina, no other revolt led to a province being renamed.[41] The names "Palestine" (in English) and "Filistin" (in Arabic) are derived from this. From 132 to 136, the Jewish leader Simon Bar Kokhba led another major revolt against the Romans, again renaming the country "Israel"[42] (see Bar Kochba Revolt coinage). The Bar-Kochba revolt probably caused more trouble for the Romans than the more famous (and better documented) revolt of 70.[43] The Christians refused to participate in the revolt and from this point the Jews regarded Christianity as a separate religion.[44] The revolt was eventually crushed by Emperor Hadrian himself. Although uncertain, it is widely thought that during the Bar Kokhba revolt, when a rabbinical assembly decided which books could be regarded as part of the Hebrew Bible, the Jewish apocrypha were left out.[45] A rabbi of this period, Simeon bar Yochai, is regarded as the author of the Zohar, the foundational text for Kabbalistic thought. However, modern scholars believe it was written in Medieval Spain.[46]

After suppressing the Bar Kochba revolt, the Romans exiled the Jews of Judea, but not of Galilee and permitted a hereditary Rabbinical Patriarch (from the House of Hillel, based in Galilee) to represent the Jews in dealings with the Romans. The most famous of these was Judah haNasi who is credited with compiling the final version of the Mishnah (a massive body of Jewish religious texts interpreting the Bible) and with strengthening the educational demands of Judaism by requiring that illiterate Jews be treated as outcasts. As a result, many illiterate Jews may have converted to Christianity.[47]

Jewish seminaries, such as those at Shefaram and Bet Shearim continued to produce scholars and the best of these became members of the Sanhedrin,[48] which was located first at Tzippori and later at Tiberias.[49] Before the Bar-Kochba uprising, an estimated 2/3 of the population of Gallilee and 1/3 of the coastal region were Jewish.[50] In the Galillee, many Synagogues have been found dating from this period. However, persecution and the economic crisis that affected the Roman empire in the 3rd century led to further Jewish migration from Syria Palaestina to the more tolerant Persian Sassanid Empire, where a prosperous Jewish community with extensive seminaries existed in the area of Babylon.

Early in the 4th century, Constantinople became the capital of the East Roman Empire and Christianity was adopted as the official religion. The name Jerusalem was restored to Aelia Capitolina and it became a Christian city. Jews were still banned from living in Jerusalem, but were allowed to visit, and it is in this period that the surviving Western Wall of the temple became sacred. In 351–2, another Jewish revolt in the Galilee erupted against a corrupt Roman governor.[51] In 362, the last pagan Roman Emperor, Julian the Apostate, announced plans to rebuild the Jewish Temple. He died while fighting the Persians in 363 and the project was discontinued.

Byzantine rule

The Roman Empire split in 390 CE and the region became part of the (Christian) East Roman Empire, known as the Byzantine Empire. Byzantine Christianity was dominated by the (Greek) Orthodox Church. In the 5th century, the Western Roman Empire collapsed leading to Christian migration into the Roman province of Palaestina Prima and development of a Christian majority. Jews numbered 10–15% of the population, concentrated largely in the Galilee. Judaism was the only non-Christian religion tolerated, but there were bans on Jews building new places of worship, holding public office or owning slaves. Several Samaritan Revolts erupted in this period,[52] resulting in the decrease of Samaritan community from about a million to a near extinction. Sacred Jewish texts written in Palestine at this time are the Gemara (400), the Jerusalem Talmud (500) and the Passover Haggadah.

In 611, Sassanid Persiainvaded the Byzantine Empire and, after a long siege, Khosrau IIcaptured Jerusalem in 614, with Jewish help, including possibly the Jewish Himyarite Kingdom in Yemen. Jews were left to govern Jerusalem when the Persians took over. The Byzantine Emperor, Heraclius, promised to restore Jewish rights and received Jewish help in defeating the Persians, but he soon reneged on the agreement after reconquering Palaestina Prima, issuing an edict banning Judaism from the Byzantine Empire. (Egyptian) Coptic Christians took responsibility for this broken pledge and fasted in penance.[53]

In 1187, the Ayyubid Sultan Saladin defeated the Crusaders in the Battle of Hattin (above Tiberias), taking Jerusalem and most of the former Kingdom of Jerusalem. Saladin's court physician was Maimonides, whose work had an enormous influence on Judaism. Maimonides was buried in Tiberias. A Crusader state centred round Acre survived in weakened form for another century.

Mamluk rule

Egyptian Mamluk Sultan, Baibars (1260–1277), conquered the region and the Mamluks ruled it until 1517, regarding it as part of Syria. In Hebron, Baibars banned Jews from worshiping at the Cave of the Patriarchs (the second holiest site in Judaism); the ban remained in place until its conquest by Israel 700 years later.[56]

Between 1535 and 1538 Suleiman the Magnificent built the current Walls of Jerusalem, Jerusalem had been without walls since Roman times. The construction followed the historic area of the city but left out one section which had previously been within the walls, which is now known as Silwan.

Old Yishuv

From the Middle Ages on, there was small scale individual Jewish migration to the Land of Israel, which tended to increase when persecution was bad elsewhere. The Jewish population was concentrated in Jerusalem, Hebron, Safed and Tiberias, known in Jewish tradition as the Four Holy Cities. In the 16th century, following a wave of Spanish immigration, Safed became a centre for study of the Kabbalah. However economic decline and conflict between the Druze and the Ottomans, led to the community's gradual decline by the mid-17th century. In 1660, a Druze revolt led to the destruction of the major Old Yishuv cities of Safed and Tiberias.[59][59][60] In 1663 Sabbatai Zevi settled in Jerusalem, proclaiming himself to be the Jewish Messiah. He acquired a large number of followers before going to Istanbul in 1666, where the Sultan forced him to covert to Islam. In the late 18th century a local Arab sheikhZahir al-Umar created a de facto independent Emirate in the Galilee. Ottoman attempts to subdue the Sheikh failed, but after Zahir's death the Ottomans restored their rule in the area.

In 1799 Napoleon briefly occupied the country and planned a proclamation inviting Jews to create a state. The proclamation was shelved following his defeat at Acre.[61] In 1831, Muhammad Ali of Egyptconquered Ottoman Syria and decided to revive and resettle much of its regions. His conscription policies led to a popular Arab revolt in 1834, resulting in major casualties for the local Arab peasants, and massacres of Christian and Jewish communities by the rebels. Following the revolt, Muhammad Pasha, the son of Muhammad Ali, expelled nearly 10,000 of the local peasants to Egypt, while bringing loyal Arab peasants from Egypt and discharged soldiers to settle the coastline of Ottoman Syria. Northern Jordan Valley was settled by his Sudanese troops.

In 1838 there was another revolt by the Druze. In 1839 Moses Montefiore met with Muhammed Pasha in Egypt and signed an agreement to establish 100-200 Jewish villages in the Damascus Eyalet of Ottoman Syria,[62] but in 1840 the Egyptians withdrew before the deal was implemented, returning the area to Ottoman governorship. In 1844, Jews constituted the largest population group in Jerusalem and by 1890 an absolute majority in the city, but as a whole the Jewish population made up far less than 10% of the country.[63][64] In 1868, the Ottomans banished the Bahá'u'lláh, one of the founders of the Bahá'í Faith, to Acre where he is buried, and the movement subsequently established its global administrative centre in nearby Haifa. In 1874, Ottoman reforms led to the area of Jerusalem gaining special status as the Mutasarrifate of Jerusalem.[65]

During the 19th century, Jews in Western Europe were increasingly granted citizenship and equality before the law; however, in Eastern Europe, they faced growing persecution and legal restrictions, including widespread pogroms. Half the world's Jews lived in the Russian Empire, where they were regarded as a separate national group and restricted to living in the Pale of Settlement. National groups in the Empire, such as the Poles, Lithuanians and Ukrainians were agitating for independence and regarded as aliens the Jews, who were usually the only non-Christian minority and spoke a distinct language (Yiddish). An independent Jewish national movement first began to emerge in the Russian Empire and the millions of Jews who were fleeing the country (mostly to the USA) carried the seeds of this nationalism wherever they went.

In 1870, an agricultural school, the Mikveh Israel, was founded near Jaffa by the Alliance Israelite Universelle, a French Jewish association. In 1878, "Russian" Jewish emigrants established the village of Petah Tikva, followed by Rishon LeZion in 1882. "Russian" Jews established the Bilu and Hovevei Zion ("Love of Zion") movements to assist settlers and these created additional communities that, unlike the traditional Ashkenazi-Jewish communities, sought to be self-reliant rather than dependent on donations from abroad. Existing Ashkenazi-Jewish communities were concentrated in the Four Holy Cities, extremely poor and lived on donations from Europe. The new migrants avoided these communities and tended to create small agricultural settlements. In Jaffa a vibrant commercial community developed in which Ashkenazi and Sephardi Jews inter-mingled. Many early migrants left due to difficulty finding work and the early settlements often remained dependent on foreign donations. Despite the difficulties, more settlements arose and the community continued to grow.

The new migration was accompanied by a revival of the Hebrew language and attracted Jews of all kinds; religious, secular, nationalists and left-wing socialists. Socialists aimed to reclaim the land by becoming peasants or workers and forming collectives. In Zionist history, the different waves of Jewish settlement are known as "aliyah". During the First Aliyah, between 1882 and 1903, approximately 35,000 Jews moved to what is now Israel. The first wave coincided with a wave of Jewish migration and Messianism among Yemenite Jews and Bukharan Jews. By 1890, Jews were a majority in Jerusalem, although the country as a whole was populated mainly by Muslim (settled and nomad Bedouins) and Christian Arabs.

Between 1904 and 1914, around 40,000 Jews settled in Southern Syria (the Second Aliyah). In 1908 the Zionist Organisation set up the Palestine Bureau (also known as the "Eretz Israel Office") in Jaffa and began to adopt a systematic Jewish settlement policy. Migrants were mainly from Russia (which then included part of Poland), escaping persecution. The first Kibbutz, Degania, was founded by nine Russian socialists in 1909. In 1909 residents of Jaffa established the first entirely Hebrew-speaking city, Ahuzat Bayit (later renamed Tel Aviv). Hebrew newspapers and books were published, Hebrew schools, Jewish political parties and workers organizations were established.

World War I

During World War I, most Jews supported the Germans because they were fighting the Russians who were regarded as the Jews' main enemy.[67] In Britain, the government sought Jewish support for the war effort for a variety of reasons including an erroneous antisemitic perception of "Jewish power" over the Ottoman Empire's Young Turks movement,[68] and a desire to secure American Jewish support for US intervention on Britain's behalf.

There was already sympathy for the aims of Zionism in the British government, including the Prime Minister Lloyd George.[69] In late 1917, the British Army drove the Turks out of Southern Syria,[70] and the British foreign minister, Lord Balfour, sent a public letter to Lord Rothschild, a leading member of his party and leader of the Jewish community. The letter subsequently became known as the Balfour Declaration of 1917. It stated that the British Government "view[ed] with favour the establishment in Palestine of a national home for the Jewish people". The declaration provided the British government with a pretext for claiming and governing the country.[71] New Middle Eastern boundaries were decided by an agreement between British and French bureaucrats. The agreement gave Britain control over what parties would begin to call "Palestine". This appellation would remain uncontroversial until the rise of Anti-Zionism in the 1940s.

British Mandate of Palestine (1920–1948)

First years

Balfour Declaration of 1917, which supported the establishment of a Jewish homeland in Palestine

The British Mandate (in effect, British rule) of Palestine, including the Balfour Declaration, was confirmed by the League of Nations in 1922 and came into effect in 1923. The boundaries of Palestine initially included modern Jordan, which was removed from the territory by Churchill a few years later. Britain signed a treaty with the United States (which did not join the League of Nations) in which the United States endorsed the terms of the Mandate.

Between 1919 and 1923, another 40,000 Jews arrived in Palestine, mainly escaping the post-revolutionary chaos of Russia (Third Aliyah), as over 100,000 Jews were massacred in this period in Ukraine and Russia.[72] Many of these immigrants became known as "pioneers" (halutzim), experienced or trained in agriculture and capable of establishing self-sustaining economies. The Jezreel Valley and the Hefer Plain marshes were drained and converted to agricultural use. Land was bought by the Jewish National Fund, a Zionist charity that collected money abroad for that purpose. A mainly socialist underground Jewish militia, Haganah ("Defense"), was established to defend outlying Jewish settlements.

The French victory over the Arab Kingdom of Syria and the Balfour Declaration led to the emergence of Palestinian Nationalism and Arab rioting in 1920 and 1921. In response, the British authorities imposed immigration quotas for Jews. Exceptions were made for Jews with over 1,000 pounds in cash (roughly 100,000 pounds at year 2000 rates) or Jewish professionals with over 500 pounds. The Jewish Agency issued the British entry permits and distributed funds donated by Jews abroad.[73] Between 1924 and 1929, 82,000 more Jews arrived (Fourth Aliyah), fleeing antisemitism in Poland and Hungary, and because the United States Immigration Act of 1924 now kept Jews out. The new arrivals included many middle-class families who moved into towns and established small businesses and workshops—although lack of economic opportunities meant that approximately a quarter later left. The first electricity generator was built in Tel Aviv in 1923 under the guidance of Pinhas Rutenberg, a former Commissar of St Petersburg in Russia's pre-Bolshevik Kerensky Government. In 1925 the Jewish Agency established the Hebrew University in Jerusalem and the Technion (technological university) in Haifa.

From 1928, the democratically elected Va'ad Leumi (Jewish National Council or JNC) became the main institution of the Palestine Jewish community ("Yishuv") and included non-Zionist Jews. As the Yishuv grew, the JNC adopted more government-type functions, such as education, health care and security. With British permission, the Va'ad raised its own taxes[74] and ran independent services for the Jewish population.[75] From 1929 its leadership was elected by Jews from 26 countries.

In 1929 tensions grew over the Kotel (Wailing Wall), a narrow alleyway where Jews were banned from using chairs or any furniture (many of the worshipers were elderly). The Mufti claimed it was Muslim property and that the Jews were seeking control of the Temple Mount. This (and general animosity) led to the August 1929 Palestine riots. The main victims were the ancient Jewish community at Hebron, which came to an end. The riots led to right-wing Zionists establishing their own militia in 1931, the Irgun Tzvai Leumi (National Military Organization, known in Hebrew by its acronym "Etzel").

Zionist political parties provided private education and health care: the General Zionists, the Mizrahi and the Socialist Zionists, each established independent health and education services and operated sports organizations funded by local taxes, donations and fees (the British administration did not invest in public services). During the whole interwar period, the British, appealing to the terms of the Mandate, rejected the principle of majority rule or any other measure that would give the Arab population, who formed the majority of the population, control over Palestinian territory.

Increase of Jewish immigration

In 1933, the Jewish Agency and the Nazis negotiated the Ha'avara Agreement (transfer agreement), under which 50,000 Jews would be transferred to Palestine. The Jews possessions were confiscated and in return the Nazis allowed the Ha'avara organization to purchase 14 million pounds worth of German goods for export to Palestine (which was used to compensate the immigrants). The Nazis did not normally allow Jews to leave with any money or to take more than two suitcases. The agreement was controversial and the Labour Zionist leader who negotiated the agreement, Haim Arlosoroff, was assassinated in Tel Aviv in 1933. The assassination was a long source of anger between the Zionist left and Zionist right. Arlosoroff once dated Magda Goebbels and may have been assassinated by the Nazis to hide the connection, which only emerged recently. In Palestine, Jewish immigration (and the Ha'avara goods) helped the economy to flourish. A port and oil refineries were built at Haifa and there was a growth of industrialization in the predominantly agricultural Palestinian economy.

Between 1929 and 1938, 250,000 Jews arrived in Palestine (Fifth Aliyah). 174,000 arrived between 1933 and 1936, after which the British increasingly restricted immigration. The influx contributed to the 1933 Palestine riots. Migration was mostly from Europe and included professionals, doctors, lawyers and professors from Germany. As a consequence German architects of the Bauhaus school made Tel-Aviv the world's only city with purely Bauhaus neighborhoods and Palestine had the highest per-capita percentage of doctors in the world.

As Fascist regimes emerged across Europe, persecution of Jews massively increased, and Jews reverted to being non-citizens deprived of civil and economic rights, subject to arbitrary persecution. Significantly antisemitic governments came to power in Poland (from 1935 the government boycotted Jews)[citation needed], Hungary, Romania and the Nazi created states of Croatia and Slovakia, while Germany annexed Austria and the Czech territories.

Arab revolt and the White Paper

Jewish immigration and Nazi propaganda contributed to the large-scale 1936–1939 Arab revolt in Palestine, a largely nationalist uprising directed at ending British rule. The head of the Jewish Agency, Ben-Gurion, responded to the Arab Revolt with a policy of "Havlagah"—self-restraint and a refusal to be provoked by Arab attacks in order to prevent polarization. The Etzel group broke off from the Haganah in opposition to this policy.

The British responded to the revolt with the Peel Commission (1936–37), a public inquiry that recommended that an exclusively Jewish territory be created in the Galilee and western coast (including the population transfer of 225,000 Arabs); the rest becoming an exclusively Arab area. The two main Jewish leaders, Chaim Weizmann and David Ben-Gurion, had convinced the Zionist Congress to approve equivocally the Peel recommendations as a basis for more negotiation.[76][77][78] The plan was rejected outright by the Palestinian Arab leadership and they renewed the revolt, which caused the British to appease the Arabs, and to abandon the plan as unworkable.[79][80]

Testifying before the Peel Commission, Weizmann said "There are in Europe 6,000,000 people ... for whom the world is divided into places where they cannot live and places where they cannot enter." In 1938, the US called an international conference to address the question of the vast numbers of Jews trying to escape Europe. Britain made its attendance contingent on Palestine being kept out of the discussion. No Jewish representatives were invited. The Nazis proposed their own solution: that the Jews of Europe be shipped to Madagascar (the Madagascar Plan).

With millions of Jews trying to leave Europe and every country in the world closed to Jewish migration, the British decided to close Palestine. The White Paper of 1939, recommended that an independent Palestine, governed jointly by Arabs and Jews, be established within 10 years. The White Paper agreed to allow 75,000 Jewish immigrants into Palestine over the period 1940–44, after which migration would require Arab approval. Both the Arab and Jewish leadership rejected the White Paper. In March 1940 the British High Commissioner for Palestine issued an edict banning Jews from purchasing land in 95% of Palestine. Jews now resorted to illegal immigration: (Aliyah Bet or "Ha'apalah"), often organized by the Mossad Le'aliyah Bet and the Irgun. Very few Jews managed to escape Europe between 1939 and 1945. Those caught by the British were mostly sent to Mauritius.

During the 2nd World War, the Jewish Agency worked to establish a Jewish army that would fight alongside the British forces. Churchill supported the plan but British Military and government opposition led to its rejection. The British demanded that the number of Jewish recruits match the number of Palestinian Arab recruits,[81] but few Arabs would fight for Britain, and the Palestinian leader, the Mufti of Jerusalem, joined the Nazis in Europe.

In May 1941, the Palmach was established to defend the Yishuv against the planned Axis invasion through North Africa. The British refusal to provide arms to the Jews, even when Rommel's forces were advancing through Egypt in June 1942 (intent on occupying Palestine) and the 1939 White Paper, led to the emergence of a Zionist leadership in Palestine that believed conflict with Britain was inevitable.[82] Despite this, the Jewish Agency called on Palestine's Jewish youth to volunteer for the British Army (both men and women). 30,000 Palestinian Jews[83] and 6,000 Palestinian Arabs[84][85] enlisted in the British armed forces during the war. In June 1944 the British agreed to create a Jewish Brigade that would fight in Italy.

Approximately 1.5 million Jews around the world served in every branch of the allied armies, mainly in the Soviet and U.S. armies. 200,000 Jews died serving in the Soviet army alone.[86] Many of these war veterans later volunteered to fight for Israel or were active in its support.

A small group (about 200 activists), dedicated to resisting the British administration in Palestine, broke away from the Etzel (which advocated support for Britain during the war) and formed the "Lehi" (Stern Gang), led by Avraham Stern. In 1943, the USSR released the Revisionist Zionist leader Menachem Begin from the Gulag and he went to Palestine, taking command of the Etzel organization with a policy of increased conflict against the British. At about the same time Yitzhak Shamir escaped from the camp in Eritrea where the British were holding Lehi activists without trial, taking command of the Lehi (Stern Gang).

Jews in the Middle East were also affected by the war. Most of North Africa came under Nazi control and many Jews were used as slaves.[87] The 1941 pro-Axis coup in Iraq was accompanied by massacres of Jews. The Jewish Agency put together plans for a last stand in the event of Rommel invading Palestine (the Nazis planned to exterminate Palestine's Jews).[88]

Between 1939 and 1945, the Nazis, aided by local forces, led systematic efforts to kill every person of Jewish extraction in Europe (The Holocaust), causing the deaths of approximately 6 million Jews. A quarter of those killed were children. The Polish and German Jewish communities, which played an important role in defining the pre-1945 Jewish world, mostly ceased to exist. In the United States and Palestine, Jews of European origin became disconnected from their families and roots. Sepharadi and Mizrahi Jews, who had been a minority, became a much more significant factor in the Jewish world. Those Jews who survived in central Europe, were displaced persons (refugees); an Anglo-American Committee of Inquiry, established to examine the Palestine issue, surveyed their ambitions and found that over 95% wanted to migrate to Palestine.[89][90][91]

In the Zionist movement the moderate Pro-British (and British citizen) Weizmann, whose son died flying in the RAF, was undermined by Britain's anti-Zionist policies.[92] Leadership of the movement passed to the Jewish Agency in Palestine, now led by the anti-British Socialist-Zionist party (Mapai) and led by David Ben-Gurion. In the diaspora, U.S. Jews now dominated the Zionist movement.

Illegal Jewish immigration and insurgency

The British Empire was severely weakened by the war. In the Middle East, the war had made Britain conscious of its dependence on Arab oil. British firms controlled Iraqi oil and Britain ruled Kuwait, Bahrain and the Emirates. Shortly after VE Day, the Labour Party won the general election in Britain. Although Labour Party conferences had for years called for the establishment of a Jewish state in Palestine, the Labour government now decided to maintain the 1939 White Paper policies.[93]

Buchenwald survivors arrive in Haifa to be arrested by the British, 15 July 1945

Illegal migration (Aliyah Bet) became the main form of Jewish entry into Palestine. Across Europe Bricha ("flight"), an organization of former partisans and ghetto fighters, smuggled Holocaust survivors from Eastern Europe to Mediterranean ports, where small boats tried to breach the British blockade of Palestine. Meanwhile, Jews from Arab countries began moving into Palestine overland. Despite British efforts to curb immigration, during the 14 years of the Aliyah Bet, over 110,000 Jews entered Palestine. By the end of World War II, the Jewish population of Palestine had increased to 33% of the total population.[94]

In an effort to win independence, Zionists now waged a guerrilla war against the British. The main underground Jewish militia, the Haganah, formed an alliance called the Jewish Resistance Movement with the Etzel and Stern Gang to fight the British. In June 1946, following instances of Jewish sabotage, the British launched Operation Agatha, arresting 2700 Jews, including the leadership of the Jewish Agency, whose headquarters were raided. Those arrested were held without trial.

In Poland, the Kielce Pogrom (July 1946) led to a wave of Holocaust survivors fleeing Europe for Palestine. Between 1945 and 1948, 100,000–120,000 Jews left Poland. Their departure was largely organized by Zionist activists in Poland under the umbrella of the semi-clandestine organization Berihah ("Flight").[95]Berihah was also responsible for the organized emigration of Jews from Romania, Hungary, Czechoslovakia and Yugoslavia, totaling 250,000 (including Poland) Holocaust survivors. The British imprisoned the Jews trying to enter Palestine in the Atlit detainee camp and Cyprus internment camps. Those held were mainly Holocaust survivors, including large numbers of children and orphans. In response to Cypriot fears that the Jews would never leave (since they lacked a state or documentation) and because the 75,000 quota established by the 1939 White Paper had never been filled, the British allowed the refugees to enter Palestine at a rate of 750 per month.

The unified Jewish resistance movement broke up in July 1946, after Etzel bombed the British Military Headquarters in the King David Hotel killing 91 people. In the days following the bombing, Tel Aviv was placed under curfew and over 120,000 Jews, nearly 20% of the Jewish population of Palestine, were questioned by the police. In the U.S., Congress criticized British handling of the situation and delayed loans that were vital to British post-war recovery. By 1947 the Labour Government was ready to refer the Palestine problem to the newly created United Nations.

On 2 April 1947, the United Kingdom requested that the question of Palestine be handled by the General Assembly.[96] The General Assembly created a committee, United Nations Special Committee on Palestine (UNSCOP), to report on "the question of Palestine".[97] In July 1947 the UNSCOP visited Palestine and met with Jewish and Zionist delegations. The Arab Higher Committee boycotted the meetings. During the visit the British Foreign Secretary Ernest Bevin ordered an illegal immigrant ship, the Exodus 1947, to be sent back to Europe. The migrants on the ship were forcibly removed by British troops at Hamburg.

The principal non-Zionist Orthodox Jewish (or Haredi) party, Agudat Israel, recommended to UNSCOP that a Jewish state be set up after reaching a religious status quo agreement with Ben-Gurion regarding the future Jewish state. The agreement would grant exemption to a quota of yeshiva (religious seminary) students and to all orthodox women from military service, would make the Sabbath the national weekend, promised Kosher food in government institutions and would allow them to maintain a separate education system.[98]

The majority report of UNSCOP proposed[99] "an independent Arab State, an independent Jewish State, and the City of Jerusalem" ..., the last to be under "an International Trusteeship System".[100] On 29 November 1947, in Resolution 181 (II), the General Assembly adopted the majority report of UNSCOP, but with slight modifications.[101] The Plan also called for the British to allow "substantial" Jewish migration by 1 February 1948.[102]

Neither Britain nor the UN Security Council took any action to implement the resolution and Britain continued detaining Jews attempting to enter Palestine. Concerned that partition would severely damage Anglo-Arab relations, Britain denied UN representatives access to Palestine during the period between the adoption of Resolution 181 (II) and the termination of the British Mandate.[103] The British withdrawal was finally completed in May 1948. However, Britain continued to hold Jews of "fighting age" and their families on Cyprus until March 1949.[104]

Civil War

The General Assembly's vote caused joy in the Jewish community and discontent among the Arab community. Violence broke out between the sides. From January 1948, operations became increasingly militarized, with the intervention of a number of Arab Liberation Army regiments inside Palestine, each active in a variety of distinct sectors around the different coastal towns. They consolidated their presence in Galilee and Samaria.[105]Abd al-Qadir al-Husayni came from Egypt with several hundred men of the Army of the Holy War. Having recruited a few thousand volunteers, he organized the blockade of the 100,000 Jewish residents of Jerusalem.[106] The Yishuv tried to supply the city using convoys of up to 100 armoured vehicles, but largely failed. By March, almost all Haganah's armoured vehicles had been destroyed, the blockade was in full operation, and hundreds of Haganah members who had tried to bring supplies into the city were killed.[107]

Up to 100,000 Arabs, from the urban upper and middle classes in Haifa, Jaffa and Jerusalem, or Jewish-dominated areas, evacuated abroad or to Arab centres eastwards.[108] This situation caused the US to withdraw their support for the Partition plan, thus encouraging the Arab League to believe that the Palestinian Arabs, reinforced by the Arab Liberation Army, could put an end to the plan for partition. The British, on the other hand, decided on 7 February 1948 to support the annexation of the Arab part of Palestine by Transjordan.[109]

David Ben-Gurion reorganized Haganah and made conscription obligatory. Every Jewish man and woman in the country had to receive military training. Thanks to funds raised by Golda Meir from sympathisers in the United States, and Stalin's decision to support the Zionist cause, the Jewish representatives of Palestine were able to purchase important arms in Eastern Europe.

Ben-Gurion gave Yigael Yadin the responsibility to plan for the announced intervention of the Arab states. The result of his analysis was Plan Dalet, in which Haganah passed from the defensive to the offensive. The plan sought to establish Jewish territorial continuity by conquering mixed zones. Tiberias, Haifa, Safed, Beisan, Jaffa and Acre fell, resulting in the flight of more than 250,000 Palestinian Arabs.[110] The situation pushed the leaders of the neighbouring Arab states to intervene.

State of Israel (1948–present)

War of Independence

Immediately following the declaration of the new state, both superpower leaders, U.S. President Harry S. Truman and Soviet leader Joseph Stalin, recognized the new state. The Arab League members Egypt, Transjordan, Syria, Lebanon and Iraq refused to accept the UN partition plan and proclaimed the right of self-determination for the Arabs across the whole of Palestine. The Arab states marched their forces into what had, until the previous day, been the British Mandate for Palestine, starting the first Arab–Israeli War. The Arab states had heavy military equipment at their disposal and were initially on the offensive. On 29 May 1948, the British initiated United Nations Security Council Resolution 50 declaring an arms embargo on the region. Czechoslovakiaviolated the resolution supplying the Jewish state with critical military hardware to match the (mainly British) heavy equipment and planes already owned by the invading Arab states. On 11 June, a month-long UN truce was put into effect.

Following independence, the Haganah became the Israel Defense Forces (IDF). The Palmach, Etzel and Lehi were required to cease independent operations and join the IDF. During the ceasefire, Etzel attempted to bring in a private arms shipment aboard a ship called "Altalena". When they refused to hand the arms to the government, Ben-Gurion ordered that the ship be sunk. Several Etzel members were killed in the fighting.

Large numbers of Jewish immigrants, many of them World War II veterans and Holocaust survivors, now began arriving in the new state of Israel, and many joined the IDF.[112]

After an initial loss of territory by the Jewish state and its occupation by the Arab armies, from July the tide gradually turned in the Israelis' favour and they pushed the Arab armies out and conquered some of the territory that had been included in the proposed Arab state. At the end of November, tenuous local ceasefires were arranged between the Israelis, Syrians and Lebanese. On 1 December King Abdullah announced the union of Transjordan with Arab Palestine west of the Jordan; only Britain recognized the annexation.

Armistice Agreements

Israel signed armistices with Egypt (24 February), Lebanon (23 March), Jordan (3 April) and Syria (20 July). No actual peace agreements were signed. With permanent ceasefire coming into effect, Israel's new borders, later known as the Green Line, were established. These borders were not recognized by the Arab states as international boundaries.[113] The IDF had overrun Galilee, Jezreel Valley, West Jerusalem, the coastal plain and the Negev. The Syrians remained in control of a strip of territory along the Sea of Galilee originally allocated to the Jewish state, the Lebanese occupied a tiny area at Rosh Hanikra, and the Egyptians retained the Gaza strip and still had some forces surrounded inside Israeli territory. Jordanian forces remained in occupation of the West Bank, where the British had stationed them before the war. Jordan annexed the areas it occupied while Egypt kept Gaza as an occupied zone.

Following the ceasefire declaration, Britain released over 2,000 Jewish detainees it was still holding in Cyprus and recognized the state of Israel. On 11 May 1949, Israel was admitted as a member of the United Nations.[114] Out of an Israeli population of 650,000, some 6,000 men and women were killed in the fighting, including 4,000 soldiers in the IDF. According to United Nations figures, 726,000 Palestinians had fled or were evicted by the Israelis between 1947 and 1949.[115] Except in Jordan, the Palestinian refugees were settled in large refugee camps in poor, overcrowded conditions. In December 1949, the UN (in response to a British proposal) established an agency (UNRWA) to provide aid to the Palestinian refugees. It became the largest single UN agency and is the only UN agency that serves a single people.

Within three years (1948 to 1951), immigration doubled the Jewish population of Israel and left an indelible imprint on Israeli society.[116][117] Overall, 700,000 Jews settled in Israel during this period.[118] Some 300,000 arrived from Asian and North African nations as part of the Jewish exodus from Arab and Muslim countries.[119] Among them, the largest group (over 100,000) was from Iraq. The rest of the immigrants were from Europe, including more than 270,000 who came from Eastern Europe,[120] mainly Romania and Poland (over 100,000 each). Nearly all the Jewish immigrants could be described as refugees, however only 136,000 who immigrated to Israel from Central Europe, had international certification because they belonged to the 250,000 Jews registered by the allies as displaced after World War II and living in Displaced persons camps in Germany, Austria and Italy.[121]

In 1950 the Knesset passed the Law of Return, which granted to all Jews and those of Jewish ancestry, and their spouses, the right to settle in Israel and gain citizenship. That year, 50,000 Yemenite Jews (99%) were secretly flown to Israel. In 1951 Iraqi Jews were granted temporary permission to leave the country and 120,000 (over 90%) opted to move to Israel. Jews also fled from Lebanon, Syria and Egypt. By the late sixties, about 500,000 Jews had left Algeria, Morocco and Tunisia. Over the course of twenty years, some 850,000 Jews from Arab countries (99%) relocated to Israel (680,000), France and the Americas.[122][123] The land and property left behind by the Jews (much of it in Arab city centres) is still a matter of some dispute. Today there are about 9,000 Jews living in Arab states, of whom 75% live in Morocco and 15% in Tunisia.

Menachem Begin addressing a mass demonstration in Tel Aviv against negotiations with Germany in 1952. The sign reads: "Our honor shall not be sold for money; Our blood shall not be atoned by goods. We shall wipe out the disgrace!"

Between 1948 and 1958, the population of Israel rose from 800,000 to two million. During this period, food, clothes and furniture had to be rationed in what became known as the Austerity Period (Tkufat haTsena). Immigrants were mostly refugees with no money or possessions and many were housed in temporary camps known as ma'abarot. By 1952, over 200,000 immigrants were living in tents or prefabricated shacks built by the government. Israel received financial aid from private donations from outside the country (mainly the United States).[124] The pressure on the new state's finances led Ben-Gurion to sign a reparations agreement with West Germany. During the Knesset debate some 5,000 demonstrators gathered and riot police had to cordon the building.[125] Israel received several billion marks and in return agreed to open diplomatic relations with Germany.

In 1949, education was made free and compulsory for all citizens until the age of 14. The state now funded the party-affiliated Zionist education system and a new body created by the Haredi Agudat Israel party. A separate body was created to provide education for the remaining Palestinian-Arab population. The major political parties now competed for immigrants to join their education systems. The government banned the existing educational bodies from the transit camps and tried to mandate a unitary secular socialist education[126] under the control of "camp managers" who also had to provide work, food and housing for the immigrants. There were attempts to force orthodox Yemenite children to adopt a secular life style by teachers, including many instances of Yemenite children having their side-curls cut by teachers. This led to the first Israeli public inquiry (the Fromkin Inquiry),[127] the collapse of the coalition, and an election in 1951, with little change in the results. In 1953 the party-affiliated education system was scrapped and replaced by a secular state education system and a state-run Modern Orthodox system. Agudat Israel were allowed to maintain their existing school system.

In its early years Israel sought to maintain a non-aligned position between the super-powers. However, in 1952, an antisemitic public trial was staged in Moscow in which a group of Jewish doctors were accused of trying to poison Stalin (the Doctors' plot), followed by a similar trial in Czechoslovakia (Slánský trial). This, and the failure of Israel to be included in the Bandung Conference (of non-aligned states), effectively ended Israel's pursuit of non-alignment. On 19 May 1950, Egypt announced that the Suez Canal was closed to Israeli ships and commerce. In 1952 a military coup in Egypt brought Abdel Nasser to power. The United States pursued close relations with the new Arab states, particularly the Nasser-led Egyptian Free Officers Movement and Ibn Saud of Saudi Arabia. Israel's solution to diplomatic isolation was to establish good relations with newly independent states in Africa[128] and with France, which was engaged in the Algerian War.

1954–1955: Sharett

In the January 1955 elections Mapai won 40 seats and the Labour Party 10, Moshe Sharett became prime minister of Israel at the head of a left-wing coalition. Between 1953 and 1956, there were intermittent clashes along all of Israel's borders as Arab terrorism and breaches of the ceasefire resulted in Israeli counter-raids. Palestinian fedayeen attacks, often organized and sponsored by the Egyptians, were made from (Egyptian occupied) Gaza. Fedayeen attacks led to a growing cycle of violence as Israel launched reprisal attacks against Gaza.[129] In 1954 the Uzi submachine gun first entered use by the Israel Defense Forces. In 1955 the Egyptian government began recruiting former Nazi rocket scientists for a missile program.[130][131]

Sharett's government was brought down by the Lavon Affair, a crude plan to disrupt U.S.–Egyptian relations, involving Israeli agents planting bombs at American sites in Egypt.[132] The plan failed when eleven agents were arrested. Defense Minister Lavon was blamed despite his denial of responsibility. The Lavon affair led to Sharett's resignation and Ben-Gurion returned to the post of prime minister.

1955–1963: Ben-Gurion II

In 1956, the increasingly pro-Soviet President Nasser of Egypt, announced the nationalization of the (French and British owned) Suez Canal, which was Egypt's main source of foreign currency. Egypt also blockaded the Gulf of Aqaba preventing Israeli access to the Red Sea. Israel made a secret agreement with the French at Sèvres to coordinate military operations against Egypt. Britain and France had already begun secret preparations for military action. It has been alleged that the French also agreed to build a nuclear plant for the Israelis and that by 1968 this was able to produce nuclear weapons. Britain and France arranged for Israel to give them a pretext for seizing the Suez Canal. Israel was to attack Egypt, and Britain and France would then call on both sides to withdraw. When, as expected, the Egyptians refused, Anglo-French forces would invade to take control of the Canal.

Israeli forces, commanded by General Moshe Dayan, attacked Egypt on 29 October 1956. On 30 October Britain and France made their pre-arranged call for both sides to stop fighting and withdraw from the Canal area, and for them to be allowed to take up positions at key points on the Canal. Egypt refused and the allies commenced air strikes on 31 October aimed at neutralizing the Egyptian air force. By 5 November the Israelis had overrun the Sinai. The Anglo-French invasion began that day. There was uproar in the UN, with the United States and USSR for once in agreement in denouncing the actions of Israel, Britain and France. A demand for a ceasefire was reluctantly accepted on 7 November.

At Egypt's request, the UN sent an Emergency Force (UNEF), consisting of 6,000 peacekeeping troops from 10 nations to supervise the ceasefire. This was the first ever UN peacekeeping operation. From 15 November the UN troops marked out a zone across the Sinai to separate the Israeli and Egyptian forces. Upon receiving U.S. guarantees of Israeli access to the Suez Canal, freedom of access out of the Gulf of Aqaba and Egyptian action to stop Palestinian raids from Gaza, the Israelis withdrew to the Negev.[133] In practice the Suez Canal remained closed to Israeli shipping. The conflict marked the end of West-European dominance in the Middle East.

Nasser emerged as the victor in the conflict, having won the political battle, however the Israeli military learnt that it did not need British or French support in order to conquer Sinai and that it could conquer the Sinai peninsula in a few days. The Israeli political leadership learnt that Israel had a limited time frame within which to operate militarily after which international political pressure would restrict Israel's freedom of action.

In 1959, there were renewed skirmishes along Israel's borders that continued throughout the early 1960s. The Arab League continued to maintain an economic boycott and there was a dispute over water rights in the River Jordan basin. With Soviet backing, the Arab states, particularly Egypt, were continuing to build up their forces. Israel's main military hardware supplier was France.

Rudolph Kastner, a minor political functionary, was accused of collaborating with the Nazis and sued his accuser. Kastner lost the trial and was assassinated two years later. In 1958 the Supreme Court exonerated him. In May 1960 Adolf Eichmann, one of the chief administrators of the Nazi Holocaust, was located in Argentina by the Mossad, which later kidnapped him to Israel. In 1961 he was put on trial, and after several months found guilty and sentenced to death. He was hanged in 1962 and is the only person ever sentenced to death by an Israeli court. Testimonies by Holocaust survivors at the trial and the extensive publicity that surrounded it has led the trial to be considered a turning point in public awareness of the Holocaust.[134]

In 1961 a Herut no-confidence motion over the Lavon affair led to Ben-Gurion's resignation. Ben-Gurion declared that he would only accept office if Lavon was fired from the position of the head of Histadrut, Israel's labour union organization. His demands were accepted and Mapai won the 1961 election (42 seats keeping Ben-Gurion as PM) with a slight reduction in its share of the seats. Menachem Begin's Herut party and the Liberals came next with 17 seats each. In 1962 the Mossad began assassinating German rocket scientists working in Egypt after one of them reported the missile program was designed to carry chemical warheads. This action was condemned by Ben-Gurion and led to the Mossad director, Isser Harel, resignation.[135] In 1963 Ben-Gurion quit again over the Lavon scandal. His attempts to make his party Mapai support him over the issue failed. Levi Eshkol became leader of Mapai and the new prime minister.

1963–1969: Eshkol

In 1963 Yigael Yadin began excavating Masada. In 1964, Egypt, Jordan and Syria developed a unified military command. Israel completed work on a national water carrier, a huge engineering project designed to transfer Israel's allocation of the Jordan river's waters towards the south of the country in realization of Ben-Gurion's dream of mass Jewish settlement of the Negev desert. The Arabs responded by trying to divert the headwaters of the Jordan, leading to growing conflict between Israel and Syria.[136]

In 1964, Israeli Rabbinical authorities accepted that the Bene Israel of India were indeed Jewish and most of the remaining Indian Jews migrated to Israel. The 2,000-strong Jewish community of Cochin had already migrated in 1954. Ben-Gurion quit Mapai to form the new party Rafi, he was joined by Shimon Peres and Moshe Dayan. Begin's Herut party joined with the Liberals to form Gahal. Mapai and Labour united for the 1965 elections, winning 45 seats and maintaining Levi Eshkol as Prime Minister. Ben-Gurion's Rafi party received 10 seats, Gahal got 26 seats becoming the second largest party.

Until 1966, Israel's principal arms supplier was France, however in 1966, following the withdrawal from Algeria, Charles de Gaulle announced France would cease supplying Israel with arms (and refused to refund money paid for 50 warplanes).[137] On 5 February 1966, the United States announced that it was taking over the former French and West German obligations, to maintain military "stabilization" in the Middle East. Included in the military hardware would be over 200 M48 tanks. In May of that year the U.S. also agreed to provide A-4 Skyhawk tactical aircraft to Israel. In 1966 security restrictions placed on Arab-Israelis were eased and efforts made to integrate them into Israeli life.

In 1966, Black and white TV broadcasts began. On 15 May 1967, the first public performance of Naomi Shemer's classic song "Jerusalem of Gold" took place and over the next few weeks it dominated the Israeli airwaves. Two days later Syria, Egypt and Jordan amassed troops along the Israeli borders, and Egypt closed the Straits of Tiran to Israeli shipping. Nasser demanded that the UNEF leave Sinai, threatening escalation to a full war. Egyptian radio broadcasts talked of a coming genocide.[138][139][140] On 26 May Nasser declared, "The battle will be a general one and our basic objective will be to destroy Israel".[141] Israel considered the Straits of Tiran closure a Casus belli. Israel responded by calling up its civilian reserves, bringing much of the Israeli economy to a halt. The Israelis set up a national unity coalition, including for the first time Menachem Begin's party, Herut, in a coalition. During a national radio broadcast, Prime Minister Levi Eshkol stammered, causing widespread fear in Israel. To calm public concern Moshe Dayan (Chief of Staff during the Sinai war) was appointed Defence Minister.

On the morning before Dayan was sworn in, 5 June 1967, the Israeli air force launched pre-emptive attacks destroying first the Egyptian air force, and then later the same day destroying the air forces of Jordan and Syria. Israel then defeated (almost successively) Egypt, Jordan and Syria. By 11 June the Arab forces were routed and all parties had accepted the cease-fire called for by UN Security Council Resolutions 235 and 236. Israel gained control of the Sinai Peninsula, the Gaza Strip, the Golan Heights, and the formerly Jordanian-controlled West Bank of the Jordan River. East Jerusalem was arguably[142]annexed by Israel. Residents were given permanent residency status and the option of applying for Israeli citizenship. The annexation was not recognized internationally (the Jordanian annexation of 1948 was also unrecognized).

Other areas occupied remained under military rule (Israeli civil law did not apply to them) pending a final settlement. The Golan was also annexed in 1981. On 22 November 1967, the Security Council adopted Resolution 242, the "land for peace" formula, which called for the establishment of a just and lasting peace based on Israeli withdrawal from territories occupied in 1967 in return for the end of all states of belligerency, respect for the sovereignty of all states in the area, and the right to live in peace within secure, recognized boundaries. The resolution was accepted by both sides, though with different interpretations, and has been the basis of all subsequent peace negotiations. After 1967 the U.S. began supplying Israel with aircraft and the Soviet block (except Romania) broke off relations with Israel. Antisemitic purges led to the final migration of the last Polish Jews to Israel.

For the first time since the end of the British Mandate, Jews could visit the Old City of Jerusalem and pray at the Western Wall (the holiest site in modern Judaism), to which they had been denied access by the Jordanians in contravention of the 1949 Armistice agreement. The four-meter-wide public alley beside the Wall was expanded into a massive plaza and worshippers were allowed to sit, or use other furniture, for the first time in centuries. In Hebron, Jews gained access to the Cave of the Patriarchs (the second most holy site in Judaism) for the first time since the 14th century (previously Jews were only allowed to pray at the entrance).[143] A third Jewish holy site, Rachel's Tomb, in Bethlehem, also became accessible. Sinai oil fields made Israel self-sufficient in energy.

In 1968 Moshe Levinger led a group of Religious Zionists who created the first Jewish settlement, a town near Hebron called Kiryat Arba. There were no other religious settlements until after 1974. Ben-Gurion's Rafi party merged with the Labour-Mapai alliance. Ben-Gurion remained outside as an independent. In 1968, compulsory education was extended until the age of 16 for all citizens (it had been 14) and the government embarked on an extensive program of integration in education. In the major cities children from mainly Sephardi/Mizrahi neighbourhoods were bused to newly established middle schools in better areas. The system remained in place until after 2000.

In March 1968, Israeli forces attacked the Palestinian militia, Fatah, at its base in the Jordanian town of Karameh. The attack was in response to land mines placed on Israeli roads. The Israelis retreated after destroying the camp. Despite heavy casualties, Palestinians claimed victory, while Fatah and the PLO (of which it formed part) became famous across the Arab world. In early 1969, fighting broke out between Egypt and Israel along the Suez Canal. In retaliation for repeated Egyptian shelling of Israeli positions along the Suez Canal, Israeli planes made deep strikes into Egypt in the 1969–1970 "War of Attrition".

1969–1974: Meir

In early 1969, Levi Eshkol died in office of a heart attack and Golda Meir became Prime Minister with the largest percentage of the vote ever won by an Israeli party, winning 56 of the 120 seats after the 1969 election. Meir was the first female prime minister of Israel and the first woman to have headed a Middle Eastern state in modern times.[144] Gahal remained on 26 seats, and was the second largest party.

In December 1969, Israeli naval commandos took five missile boats during the night from Cherbourg Harbour in France. Israel had paid for the boats but the French had refused to supply them. In July 1970 the Israelis shot down five Soviet fighters that were aiding the Egyptians in the course of the War of Attrition. Following this, the U.S. worked to calm the situation and in August 1970 a cease fire was agreed.

In September 1970King Hussein of Jordan drove the Palestine Liberation Organization out of his country. On September 18, 1970, Syrian tanks invaded Jordan, intending to aid the PLO. At the request of the U.S., Israel moved troops to the border and threatened Syria, causing the Syrians to withdraw. The center of PLO activity then shifted to Lebanon, where the 1969 Cairo agreement gave the Palestinians autonomy within the south of the country. The area controlled by the PLO became known by the international press and locals as "Fatahland" and contributed to the 1975–1990 Lebanese Civil War. The event also led to Hafez al-Assad taking power in Syria. Egyptian President Nasser died immediately after and was succeeded by Anwar Sadat.

Increased Soviet antisemitism and enthusiasm generated by the 1967 victory led to a wave of Soviet Jews applying to emigrate to Israel. Those who left could only take two suitcases. Most Jews were refused exit visas and persecuted by the authorities. Some were arrested and sent to Gulag camps, becoming known as Prisoners of Zion. During 1971, violent demonstrations by the Israeli Black Panthers, made the Israeli public aware of resentment among Mizrahi Jews at ongoing discrimination and social gaps.[145] In 1972 the U.S. Jewish Mafia leader, Meyer Lansky, who had taken refuge in Israel, was deported to the United States.

In 1972 the new Egyptian President Anwar Sadat expelled the Soviet advisers from Egypt. This and frequent invasion exercises by Egypt and Syria led to Israeli complacency about the threat from these countries. In addition the desire not to be held responsible for initiating conflict and an election campaign highlighting security, led to an Israeli failure to mobilize, despite receiving warnings of an impending attack.[147]

The Yom Kippur War (also known as the October War) began on 6 October 1973 (the Jewish Day of Atonement), the holiest day in the Jewish calendar and a day when adult Jews are required to fast. The Syrian and Egyptian armies launched a well-planned surprise attack against the unprepared Israeli Defense Forces. For the first few days there was a great deal of uncertainty about Israel's capacity to repel the invaders. Both the Soviets and the Americans (at the orders of Richard Nixon) rushed arms to their allies. The Syrians were repulsed by the tiny remnant of the Israeli tank force on the Golan and, although the Egyptians captured a strip of territory in Sinai, Israeli forces crossed the Suez Canal, trapping the Egyptian Third Army in Sinai and were 100 kilometres from Cairo. The war cost Israel over 2,000 dead, resulted in a heavy arms bill (for both sides) and made Israelis more aware of their vulnerability. It also led to heightened superpower tension. Following the war, both Israelis and Egyptians showed greater willingness to negotiate. On 18 January 1974, extensive diplomacy by U.S. Secretary of State Henry Kissinger led to a Disengagement of Forces agreement with the Egyptian government and on 31 May with the Syrian government.

The war led the Saudi government to initiate the 1973 oil crisis, an oil embargo in conjunction with OPEC, against countries trading with Israel. Severe shortages led to massive increases in the price of oil, and as a result, many countries broke off relations with Israel or downgraded relations, and Israel was banned from participation in the Asian Games and other Asian sporting events.

State funding was introduced for elected parties. The new system made parties independent of wealthy donors and gave Knesset members more power over party funding, however it also made them less dependent on existing party structures and able to take their funding elsewhere.[148] Prior to the December 1973 elections, Gahal and a number of right-wing parties united to form the Likud (led by Begin). In the December 1973 elections, Labour won 51 seats, leaving Golda Meir as Prime Minister. The Likud won 39 seats.

In May 1974, Palestinians attacked a school in Ma'alot, holding 102 children hostage. Twenty-two children were killed. In November 1974 the PLO was granted observer status at the UN and Yasser Arafat addressed the General Assembly. Later that year the Agranat Commission, appointed to assess responsibility for Israel's lack of preparedness for the war, exonerated the government of responsibility, and held the Chief of Staff and head of military intelligence responsible. Despite the report, public anger at the Government led to Golda Meir's resignation.

In July 1976, an Air France plane carrying 260 people was hijacked by Palestinian and German terrorists and flown to Uganda, then ruled by Idi Amin Dada. There, the Germans separated the Jewish passengers from the non-Jewish passengers, releasing the non-Jews. The hijackers threatened to kill the remaining, 100-odd Jewish passengers (and the French crew who had refused to leave). Despite the distances involved, Rabin ordered a daring rescue operation in which the kidnapped Jews were freed.[149] UN Secretary General Waldheim described the raid as "a serious violation of the national sovereignty of a United Nations member state" (meaning Uganda).[150][151] Waldheim was a former Nazi and suspected war criminal, with a record of offending Jewish sensibilities.[152][153]

Rabin resigned on April 1977 after it emerged that his wife maintained a dollar account in the United States (illegal at the time), which had been opened while Rabin was Israeli ambassador. The incident became known as the Dollar Account affair. Shimon Peres informally replaced him as prime minister, leading the Alignment in the subsequent elections.

1977–1983: Begin

In a surprise result, the Likud led by Menachem Begin won 43 seats in the 1977 elections (Labour got 32 seats). This was the first time in Israeli history that the government was not led by the left. A key reason for the victory was anger among Mizrahi Jews at discrimination, which was to play an important role in Israeli politics for many years. Talented small town Mizrahi social activists, unable to advance in the Labour party, were readily embraced by Begin. Moroccan-born David Levy and Iranian-born Moshe Katzav were part of a group who won Mizrahi support for Begin. Many Labour voters voted for the Democratic Movement for Change (15 seats) in protest at high-profile corruption cases. The party joined in coalition with Begin and disappeared at the next election.

In addition to starting a process of healing the Mizrahi–Ashkenazi divide, Begin's government included Ultra-Orthodox Jews and was instrumental in healing the Zionist–Ultra-Orthodox rift, however it did so at the cost of expanding the exemption from military service to all Haredi Jewish students of military age. This led to creation of a huge class of unemployed Haredi Jews (the exemption was conditional on attendance of a religious seminary, so they kept studying until they were too old for military service). By remaining students, they were a massive burden on the state, while also failing to participate in the military burden.

Begin's liberalization of the economy led to hyper-inflation (around 150% inflation) but enabled Israel to begin receiving U.S. financial aid. Begin actively supported Gush Emunim's efforts to settle the West Bank and Jewish settlements in the occupied territories received government support, thus laying the grounds for intense conflict with the Palestinian population of the occupied territories.

In November 1977, Egyptian President Anwar Sadat broke 30 years of hostility with Israel by visiting Jerusalem at the invitation of Israeli Prime Minister Menachem Begin. Sadat's two-day visit included a speech before the Knesset and was a turning point in the history of the conflict. The Egyptian leader created a new psychological climate in the Middle East in which peace between Israel and its Arab neighbours seemed possible. Sadat recognized Israel's right to exist and established the basis for direct negotiations between Egypt and Israel. Following Sadat's visit, 350 Yom Kippur War veterans organized the Peace Now movement to encourage Israeli governments to make peace with the Arabs.

In September 1978, U.S. President Jimmy Carter invited President Sadat and Prime Minister Begin to meet with him at Camp David, and on 11 September they agreed on a framework for peace between Israel and Egypt, and a comprehensive peace in the Middle East. It set out broad principles to guide negotiations between Israel and the Arab states. It also established guidelines for a West Bank–Gaza transitional regime of full autonomy for the Palestinians residing in these territories, and for a peace treaty between Egypt and Israel. The treaty was signed 26 March 1979 by Begin and Sadat, with President Carter signing as witness. Under the treaty, Israel returned the Sinai peninsula to Egypt in April 1982. The final piece of territory to be repatriated was Taba, adjacent to Eilat, returned in 1989. The Arab League reacted to the peace treaty by suspending Egypt from the organization and moving its headquarters from Cairo to Tunis. Sadat was assassinated in 1981 by Islamic fundamentalist members of the Egyptian army who opposed peace with Israel. Following the agreement Israel and Egypt became the two largest recipients of U.S. military and financial aid[155] (Iraq and Afghanistan have now overtaken them).

In the decades following the 1948 war, Israel's border with Lebanon was quiet compared to its borders with other neighbours. But the 1969 Cairo agreement gave the PLO a free hand to attack Israel from South Lebanon. The area was governed by the PLO independently of the Lebanese Government and became known as "Fatahland" (Fatah was the largest faction in the PLO). Palestinian irregulars constantly shelled the Israeli north, especially the town of Kiryat Shmona, which was a Likud stronghold inhabited primarily by Jews who had fled the Arab world. Lack of control over Palestinian areas was an important factor in causing civil war in Lebanon.

In June 1982, the attempted assassination of Shlomo Argov, the ambassador to Britain, was used as a pretext for an Israeli invasion aiming to drive the PLO out of the southern half of Lebanon. Sharon agreed with Chief of StaffRaphael Eitan to expand the invasion deep into Lebanon even though the cabinet had only authorized a 40 kilometre deep invasion.[156] The invasion became known as the 1982 Lebanon War and the Israeli army occupied Beirut, the only time an Arab capital has been occupied by Israel. Some of the Shia and Christian population of South Lebanon welcomed the Israelis, as PLO forces had maltreated them, but Lebanese resentment of Israeli occupation grew over time and the Shia became gradually radicalized under Iranian guidance.[157] Constant casualties among Israeli soldiers and Lebanese civilians led to growing opposition to the war in Israel.

In August 1982, the PLO withdrew its forces from Lebanon (moving to Tunisia). Israel helped engineer the election of a new Lebanese president, Bashir Gemayel, who agreed to recognize Israel and sign a peace treaty. Gemayal was assassinated before an agreement could be signed, and one day later Phalangist Christian forces led by Elie Hobeika entered two Palestinian refugee camps and massacred the occupants. The massacres led to the biggest demonstration ever in Israel against the war, with as many as 400,000 people (almost 10% of the population) gathering in Tel Aviv. In 1983, an Israeli public inquiry found that Israel's defence minister, Sharon, was indirectly but personally responsible for the massacres.[158] It also recommended that he never again be allowed to hold the post (it did not forbid him from being Prime Minister). In 1983, the May 17 Agreement was signed between Israel and Lebanon, paving the way for an Israeli withdrawal from Lebanese territory through a few stages. Israel continued to operate against the PLO until its eventual departure in 1985, and kept a small force stationed in Southern Lebanon in support of the South Lebanon Army until May 2000.

In September 1983, Begin resigned and was succeeded by Yitzhak Shamir as prime minister. The 1984 election was inconclusive, and led to a power sharing agreement between Shimon Peres of the Alignment (44 seats) and Shamir of Likud (41 seats). Peres was prime minister from 1984 to 1986 and Shamir from 1986 to 1988. In 1984, continual discrimination against Sephardi Ultra-Orthodox Jews by the Ashkenazi Ultra-Orthodox establishment led political activist Aryeh Deri to leave the Agudat Israel party and join former chief Rabbi Ovadia Yosef in forming Shas, a new party aimed at the non-Ashkenazi Ultra-Orthodox vote. The party won 4 seats in the first election it contested and over the next twenty years was the third largest party in the Knesset. Shas established a nationwide network of free Sephardi Orthodox schools. In 1984, during a severe famine in Ethiopia, 8,000 Ethiopian Jews were secretly transported to Israel. In 1986 Natan Sharansky, a famous Russian human rights activist and Zionist refusenik (denied an exit visa), was released from the Gulag in return for two Soviet spies.

In June 1985, Israel withdrew most of its troops from Lebanon, leaving a residual Israeli force and an Israeli-supported militia in southern Lebanon as a "security zone" and buffer against attacks on its northern territory. Since then, IDF fought for many years against the Shia organization Hezbollah, which became a growing threat to Israel. By July 1985, Israel's inflation, buttressed by complex index linking of salaries, had reached 480% per annum and was the highest in the world. Peres introduced emergency control of prices and cut government expenditure successfully bringing inflation under control. The currency (known as the old Israeli shekel) was replaced and renamed the Israeli new shekel at a rate of 1,000 old shkalim = 1 new shekel. In October 1985, Israel responded to a Palestinian terrorist attack in Cyprus by bombing the PLO headquarters in Tunis. Growing Israeli settlement and continuing occupation of the West Bank and Gaza Strip, led to the first Palestinian Intifada (uprising) in 1987, which lasted until the Madrid Conference of 1991, despite Israeli attempts to suppress it. Human rights abuses by Israeli troops led a group of Israelis to form B'Tselem, an organization devoted to improving awareness and compliance with human rights requirements in Israel.

In August 1987, the Israeli government cancelled the IAI Lavi project, an attempt to develop an independent Israeli fighter aircraft. The Israelis found themselves unable to sustain the huge development costs, and faced U.S. opposition to a project that threatened U.S. influence in Israel and U.S. global military ascendancy. In September 1988, Israel launched an Ofeq reconsaissance satellite into orbit, using a Shavit rocket, thus becoming one of only eight countries possessing a capacity to independently launch satellites into space (two more have since developed this ability). The Alignment and Likud remained neck and neck in the 1988 elections (39:40 seats). Shamir successfully formed a national unity coalition with the Labour Alignment. In March 1990, Alignment leader Shimon Peres engineered a defeat of the government in a non-confidence vote and then tried to form a new government. He failed and Shamir became prime minister at the head of a right-wing coalition.

In 1990, the Soviet Union finally permitted free emigration of Soviet Jews to Israel. Prior to this, Jews trying to leave the USSR faced persecution; those who succeeded arrived as refugees. Over the next few years some one million Soviet citizens migrated to Israel. Although there was concern that some of the new immigrants had only a very tenuous connection to Judaism, and many were accompanied by non-Jewish relatives, this massive wave of migration slowly transformed Israel, bringing large numbers of highly educated Soviet Jews and creating a powerful Russian culture in Israel.

In August 1990, Iraq invaded Kuwait, triggering the Gulf War between Iraq and a large allied force, led by the United States. Iraq attacked Israel with 39 Scud missiles. Israel did not retaliate at request of the U.S., fearing that if Israel responded against Iraq, other Arab nations might desert the allied coalition. Israel provided gas masks for both the Palestinian population and Israeli citizens. In May 1991, during a 36-hour period, 15,000 Beta Israel (Ethiopian Jews) were secretly airlifted to Israel. The coalition's victory in the Gulf War opened new possibilities for regional peace, and in October 1991 the U.S. President, George H.W. Bush, and Soviet Union Premier, Mikhail Gorbachev, jointly convened a historic meeting in Madrid of Israeli, Lebanese, Jordanian, Syrian, and Palestinian leaders. Shamir opposed the idea but agreed in return for loan guarantees to help with absorption of immigrants from the former Soviet Union. His participation in the conference led to the collapse of his (right-wing) coalition.

1992–1996: Rabin II; Peres II

In the 1992 elections, the Labour Party, led by Yitzhak Rabin, won a significant victory (44 seats) promising to pursue peace while promoting Rabin as a "tough general" and pledging not to deal with the PLO in any way. The pro-peace Zionist party Meretz won 12 seats, and the Arab and communist parties a further 5, meaning that parties supporting a peace treaty had a full (albeit small) majority in the Knesset. Later that year, the Israeli electoral system was changed to allow for direct election of the prime minister. It was hoped this would reduce the power of small parties (mainly the religious parties) to extract concessions in return for coalition agreements. The new system had the opposite effect; voters could split their vote for prime minister from their (interest based) party vote, and as a result larger parties won fewer votes and smaller parties becoming more attractive to voters. It thus increased the power of the smaller parties. By the 2006 election the system was abandoned.

Prime Minister Yitzhak Rabin and PLO Chairman Yasser Arafat signed the Israeli–Palestinian Interim Agreement on the West Bank and the Gaza Strip on 28 September 1995 in Washington. The agreement was witnessed by President Bill Clinton on behalf of the United States and by Russia, Egypt, Norway and the European Union, and incorporates and supersedes the previous agreements, marking the conclusion of the first stage of negotiations between Israel and the PLO. The agreement allowed the PLO leadership to relocate to the occupied territories and granted autonomy to the Palestinians with talks to follow regarding final status. In return the Palestinians promised to abstain from use of terror and changed the Palestinian National Covenant, which had called for the expulsion of all Jews who migrated after 1917 and the elimination of Israel.[162]

1996–1999: Netanyahu I

The May 1996 elections were the first featuring direct election of the prime minister and resulted in a narrow election victory for Likud leader Binyamin Netanyahu. A spate of suicide bombings reinforced the Likud position for security. Hamas claimed responsibility for most of the bombings. Despite his stated differences with the Oslo Accords, Prime Minister Netanyahu continued their implementation, but his prime ministership saw a marked slow-down in the Peace Process. Netanyahu also pledged to gradually reduce U.S. aid to Israel.[163]

In September 1996, a Palestinian riot broke out against the creation of an exit in the Western Wall tunnel. Over the subsequent few weeks, around 80 people were killed as a result.[164][165] In January 1997 Netanyahu signed the Hebron Protocol with the Palestinian Authority, resulting in the redeployment of Israeli forces in Hebron and the turnover of civilian authority in much of the area to the Palestinian Authority.

1999–2001: Barak

In the election of July 1999, Ehud Barak of the Labour Party became Prime Minister. His party was the largest in the Knesset with 26 seats. In September 1999 the Supreme Court of Israel ruled that the use of torture in interrogation of Palestinian prisoners was illegal.[166] On 21 March 2000, Pope John Paul II arrived in Israel for a historic visit.

On 25 May 2000, Israel unilaterally withdrew its remaining forces from the "security zone" in southern Lebanon. Several thousand members of the South Lebanon Army (and their families) left with the Israelis. The UN Secretary-General concluded[167] that, as of 16 June 2000, Israel had withdrawn its forces from Lebanon in accordance with UN Security Council Resolution 425. Lebanon claims that Israel continues to occupy Lebanese territory called "Sheba'a Farms" (however this area was governed by Syria until 1967 when Israel took control).[168] The Sheba'a Farms provided Hezbollah with a ruse to maintain warfare with Israel.[169] The Lebanese government, in contravention of the UN Security Council resolution, did not assert sovereignty in the area, which came under Hezbollah control. In the Fall of 2000, talks were held at Camp David to reach a final agreement on the Israel/Palestine conflict. Ehud Barak offered to meet most of the Palestinian teams requests for territory and political concessions, including Arab parts of east Jerusalem; however, Arafat abandoned the talks without making a counterproposal.[170]

In July 2000, Aryeh Deri was sentenced to 3 years in prison for bribe taking. Deri is regarded as the mastermind behind the rise of Shas and was a government minister at the age of 24. Political manipulation meant the investigation lasted for years. Deri subsequently sued a Police Officer who alleged that he was linked to the traffic-accident death of a witness, who was run over in New York by a driver who had once been in the employ of an associate of Deri.[171]

On 28 September 2000, Israeli opposition leader Ariel Sharon visited the Al-Aqsa compound, or Temple Mount, the following day the Palestinians launched the al-Aqsa Intifada. David Samuels and Khaled Abu Toameh have stated that the uprising was planned much earlier.[172][173] In October 2000, Palestinians destroyed Joseph's Tomb, a Jewish shrine in Nablus.

The Arrow missile, a missile designed to destroy ballistic missiles, including Scud missiles, was first deployed by Israel. In 2001, with the Peace Process increasingly in disarray, Ehud Barak called a special election for Prime Minister. Barak hoped a victory would give him renewed authority in negotiations with the Palestinians. Instead opposition leader Ariel Sharon was elected PM. After this election, the system of directly electing the Premier was abandoned.

The failure of the peace process, increased Palestinian terror and occasional attacks by Hezbollah from Lebanon, led much of the Israeli public and political leadership to lose confidence in the Palestinian Authority as a peace partner. Most felt that many Palestinians viewed the peace treaty with Israel as a temporary measure only.[174] Many Israelis were thus anxious to disengage from the Palestinians. In response to a wave of suicide bomb attacks, culminating in the "Passover massacre" (see List of Israeli civilian casualties in the Second Intifada), Israel launched Operation Defensive Shield in March 2002, and Sharon began the construction of a barrier around the West Bank. Around the same time, the Israeli town of Sderot and other Israeli communities near Gaza became subject to constant shelling and mortar bomb attacks from Gaza.

Thousands of Jews from Latin America began arriving in Israel due to economic crises in their countries of origin. In January 2003 separate elections were held for the Knesset. Likud won the most seats (27). An anti-religion party, Shinui, led by media pundit Tommy Lapid, won 15 seats on a secularist platform, making it the third largest party (ahead of orthodox Shas). Internal fighting led to Shinui's demise at the next election. In 2004, the Black Hebrews were granted permanent residency in Israel. The group had begun migrating to Israel 25 years earlier from the United States, but had not been recognized as Jews by the state and hence not granted citizenship under Israel's Law of Return. They had settled in Israel without official status. From 2004 onwards, they received citizen's rights.

The Sharon government embarked on an extensive program of construction of desalinization plants that freed Israel of the fear of drought. Some of the Israeli desalinization plants are the largest of their kind in the world.[175]

In May 2004, Israel launched Operation Rainbow in southern Gaza to create a safer environment for the IDF soldiers along the Philadelphi Route. On September 30, 2004, Israel carried out Operation Days of Penitence in northern Gaza to destroy the launching sites of Palestinian rockets which were used to attack Israeli towns. In 2005, all Jewish settlers were evacuated from Gaza (some forcibly) and their homes demolished. Disengagement from the Gaza Strip was completed on 12 September 2005. Military disengagement from the northern West Bank was completed ten days later.

In 2005 Sharon left the Likud and formed a new party called Kadima, which accepted that the peace process would lead to creation of a Palestinian state. He was joined by many leading figures from both Likud and Labour.

Hamas won the Palestinian legislative election, 2006, the first and only genuinely free Palestinian elections. Hamas' leaders rejected all agreements signed with Israel, refused to recognize Israel's right to exist, refused to abandon terror, and occasionally claimed the Holocaust was a Jewish conspiracy. The withdrawal and Hamas victory left the status of Gaza unclear, Israel claimed it was no longer an occupying power but continued to control air and sea access to Gaza although it did not exercise sovereignty on the ground. Egypt insisted that it was still occupied and refused to open border crossings with Gaza, although it was free to do so.[176]

2006–2009: Olmert

Ehud Olmert was elected Prime Minister after his party, Kadima, won the most seats (29) in the Israeli legislative election, 2006. In 2005 Mahmoud Ahmadinejad was officially elected president of Iran; since then, Iranian policy towards Israel has grown more confrontational. Israeli analysts believe Ahmadinejad has worked to undermine the peace process with arms supplies and aid to Hezbullah in South Lebanon and Hamas in Gaza,[178] and is developing nuclear weapons, possibly for use against Israel.[179] Iranian support for Hezbollah and its nuclear arms program are in contravention of UN Security Council resolutions 1559 and 1747. Iran also encourages Holocaust denial. Following the Israeli withdrawal from Lebanon, Hezbollah had mounted periodic attacks on Israel, which did not lead to Israeli retaliation. Similarly, the withdrawal from Gaza led to incessant shelling of towns around the Gaza area with only minimal Israeli response. The failure to react led to criticism from the Israeli right and undermined the government.

On 14 March 2006, Israel carried out an operation in the Palestinian Authority prison of Jericho in order to capture Ahmad Sa'adat and several Palestinian Arab prisoners located there who assassinated Israeli politician Rehavam Ze'evi in 2001. The operation was conducted as a result of the expressed intentions of the newly elected Hamas government to release these prisoners. On 25 June 2006, a Hamas force crossed the border from Gaza and attacked a tank, capturing Israeli soldier Gilad Shalit, sparking clashes in Gaza.[180]

On 12 July, Hezbollah attacked Israel from Lebanon, shelled Israeli towns and attacked a border patrol, taking two dead or badly wounded Israeli soldiers. These incidents led Israel to initiate the Second Lebanon War, which lasted through August 2006. Israeli forces entered some villages in Southern Lebanon, while the air force attacked targets all across the country. Israel only made limited ground gains until the launch of Operation Changing Direction 11, which lasted for 3 days with disputed results. Shortly before a UN ceasefire came into effect, Israeli troops captured Wadi Saluki. The war concluded with Hezbollah evacuating its forces from Southern Lebanon, while the IDF remained until its positions could be handed over to the Lebanese Armed Forces and UNIFIL.

In 2007 education was made compulsory until the age of 18 for all citizens (it had been 16). Refugees from the genocide in Darfur, mostly Muslim, arrived in Israel illegally, with some given Asylum.[181][182]Illegal immigrants arrived mainly from Africa in addition to foreign workers overstaying their visas. The numbers of such migrants are not known, and estimates vary between 30,000 and over 100,000.

In June 2007, Hamas took control of the Gaza Strip in the course of the Battle of Gaza,[183] seizing government institutions and replacing Fatah and other government officials with its own.[184] Following the takeover, Egypt and Israel imposed a partial blockade, on the grounds that Fatah had fled and was no longer providing security on the Palestinian side, and to prevent arms smuggling by terrorist groups. On 6 September 2007, the Israeli Air Force destroyed a nuclear reactor in Syria. On 28 February 2008, Israel launched a military campaign in Gaza in response to the constant firing of Qassam rockets by Hamas militants. On July 16, 2008, Hezbollah swapped the bodies of Israeli soldiers Ehud Goldwasser and Eldad Regev, kidnapped in 2006, in exchange for the Lebanese terrorist Samir Kuntar, four Hezbollah prisoners, and the bodies of 199 Palestinian Arab and Lebanese fighters.[185]

Olmert came under investigation for corruption and this led him to announce on 30 July 2008, that he would be stepping down as Prime Minister following election of a new leader of the Kadima party in September 2008. Tzipi Livni won the election, but was unable to form a coalition and Olmert remained in office until the general election. Israel carried out Operation Cast Lead in the Gaza Strip from 27 December 2008 to 18 January 2009 in response to rocket attacks from Hamas militants,[186] leading to a decrease of Palestinian rocket attacks.[187]

In the 2009 legislative election Likud won 27 seats and Kadima 28; however, the right-wing camp won a majority of seats, and President Shimon Peres called on Netanyahu to form the government. Russian immigrant-dominated Yisrael Beiteinu came third with 15 seats, and Labour was reduced to fourth place with 13 seats. In 2009, Israeli billionaire Yitzhak Tshuva announced the discovery of huge natural gas reserves off the coast of Israel.[188]

On 31 May 2010, an international incident broke out in the Mediterranean Sea when foreign activists trying to break the maritime blockade over Gaza, clashed with Israeli troops. During the struggle, nine Turkish activists were killed. In late September 2010 took place direct negotiations between Israel and the Palestinians without success. As a defensive countermeasure to the rocket threat against Israel's civilian population, at the end of March 2011 Israel began to operate the advanced mobile air defence system "Iron Dome"[189] in the southern region of Israel and along the border with the Gaza Strip.

On 14 July 2011, the largest social protest in the history of Israel began in which hundreds of thousands of protesters from a variety of socio-economic and religious backgrounds in Israel protested against the continuing rise in the cost of living (particularly housing) and the deterioration of public services in the country (such as health and education). The peak of the demonstrations took place on 3 September 2011, in which about 400,000 people demonstrated across the country.

In June 2012, Israel transferred the bodies of 91 Palestinian suicide bombers and other militants as part of what Mark Regev, spokesman for Netanyahu, described as a "humanitarian gesture" to PA chairman Mahmoud Abbas to help revive the peace talks, and reinstate direct negotiations between Israel and the Palestinians.[196] On 21 October 2012, United States and Israel began their biggest joint air and missile defense exercise, known as Austere Challenge 12, involving around 3,500 U.S. troops in the region along with 1,000 IDF personnel, expected to last three weeks.[197] Germany and Britain also participated.[198] In response to over a hundred rocket attacks on southern Israeli cities, Israel began an operation in Gaza on 14 November 2012, with the targeted killing of Ahmed Jabari, chief of Hamas military wing, and airstrikes against twenty underground sites housing long-range missile launchers capable of striking Tel Aviv. In January 2013, construction of the barrier on the Israeli-Egyptian border was completed in its main section.[199]

Benjamin Netanyahu was elected Prime Minister again after the Likud Yisrael Beiteinu alliance won the most seats (31) in the 2013 legislative election and formed a coalition government with secular centrist Yesh Atid party (19), rightist The Jewish Home (12) and Livni's Hatnuah (6), excluding Haredi parties. Labour came in third with 15 seats.[200] In July 2013, as a "good will gesture" to restart peace talks with the Palestinian Authority, Israel agreed to release 104 Palestinian prisoners, most of whom had been in jail since before the 1993 Oslo Accords,[201] including militants who had killed Israeli civilians.[201][202] In April 2014, Israel suspended peace talks after Hamas and Fatah agreed to form a unity government.[203]

↑Joel Rappel, History of Eretz Israel from Prehistory up to 1882 (1980), vol. 2, p. 531. "In 1662 Sabbathai Sevi arrived to Jerusalem. It was the time when the Jewish settlements of Galilee were destroyed by the Druze: Tiberias was completely desolate and only a few of former Safed residents had returned...."

↑Barbara Tuchman, Bible and Sword: How the British came to Palestine, Macmillan 1956, chapter 9

↑Barbara Tuchman, Bible and Sword: How the British came to Palestine, Macmillan 1956, page 194-5

↑Benny Morris, The Birth of the Palestinian Refugee Problem Revisited, p. 48; p. 11 "while the Zionist movement, after much agonising, accepted the principle of partition and the proposals as a basis for negotiation"; p. 49 "In the end, after bitter debate, the Congress equivocally approved –by a vote of 299 to 160 – the Peel recommendations as a basis for further negotiation."

↑For more information see Palestine: Retreat from the Mandate, The making of British Policy, 1936–1945 by Michael Cohen, New York 1979 Chapter 3

↑Samir A. Mutawi (18 July 2002). Jordan in the 1967 War. Cambridge University Press. p. 95. ISBN978-0-521-52858-0. On 26 May he declared, "The battle will be a general one and our basic objective will be to destroy Israel<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>

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